STO — Security Token Offerings

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STO — Security Token Offerings

Regulated Digital Equity Issuance & Smart-Contract-Based Trading on Börse Stuttgart

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Executive Summary

TSG Lab AG’s STO framework enables companies to “go public” through fully regulated Security Token Offerings — issuing digital equity on blockchain infrastructure that is listed and traded on Börse Stuttgart Digital Exchange (BSDEX) and compatible European regulated venues. The solution replaces the traditional IPO underwriting chain with a streamlined, smart-contract-governed issuance, settlement, and secondary-trading pipeline that cuts time-to-market from 12–18 months to as little as 8–12 weeks while reducing total issuance costs by 60–75%.

Business Challenges

  • Traditional IPOs cost EUR 2–5M+ in advisory, legal, and underwriting fees — prohibitive for SMEs and growth-stage companies
  • 12–18 month timelines from decision to first trade on a regulated exchange
  • Fragmented post-trade infrastructure: separate CSD, clearing house, registrar, and transfer agent
  • T+2 settlement cycles locking up capital and creating counterparty risk
  • Limited investor access — retail participation restricted by high minimum tickets and geographic barriers
  • Evolving EU regulatory landscape (MiCAR, DLT Pilot Regime, eWpG in Germany) creating compliance uncertainty

Technical Solution

  • Token Standard: ERC-1400 / ERC-3643 (T-REX) security token standard with partition-based transfer restrictions, on-chain KYC/AML identity registry, and forced-transfer capability for regulatory compliance
  • Smart Contract Suite: SecurityTokenFactory, ComplianceModule (whitelist, jurisdiction, lock-up enforcement), DividendDistributor, CorporateActions (splits, buybacks, voting), EscrowSettlement
  • Exchange Integration: Direct API connectivity to Börse Stuttgart Digital Exchange (BSDEX) order book, matching engine, and custody infrastructure — enabling regulated secondary trading from day one
  • Investor Onboarding: Automated KYC/AML pipeline with eIDAS-compliant digital identity verification, accreditation checks, and jurisdiction-aware subscription workflows
  • Settlement: Atomic DvP (Delivery versus Payment) via smart contract escrow — achieving T+0 settlement with on-chain finality, eliminating counterparty risk

Tech Stack: Ethereum · Polygon PoS · ERC-1400 · ERC-3643 (T-REX) · Solidity · BSDEX API · eIDAS · IPFS · React · Node.js

Regulatory Framework & Compliance

🇩🇪 German eWpG

Full compliance with the Electronic Securities Act (eWpG) enabling crypto securities registered on distributed ledgers

🇪🇺 EU DLT Pilot Regime

Designed for the EU DLT Pilot Regime sandbox, enabling cross-border issuance and trading across EU member states

🇪🇺 MiCAR Ready

Architecture aligned with Markets in Crypto-Assets Regulation for future-proof compliance across all EU jurisdictions

🇨🇭 Swiss DLT Act

Compatible with Swiss DLT legislation and SIX Digital Exchange (SDX) for dual-listing opportunities

Business Benefits & ROI

Issuance Cost Reduction

60–75% lower total cost vs. traditional IPO — making public markets accessible to EUR 5–50M raises

Time-to-Market

8–12 weeks from engagement to first trade on a regulated exchange (vs. 12–18 months traditional)

Settlement Efficiency

T+0 atomic settlement eliminates counterparty risk and frees up capital locked in T+2 cycles

Investor Access

Fractional ownership from EUR 100 — opening regulated equity to retail and global investors 24/7

Automated Corporate Actions

Dividends, voting, and cap-table management executed autonomously via smart contracts — 80% admin reduction

Secondary Liquidity

Immediate regulated secondary trading on BSDEX — no lock-up-driven illiquidity discount

Börse Stuttgart Digital Exchange (BSDEX)

Our STO framework is purpose-built for integration with Börse Stuttgart’s digital asset infrastructure — Germany’s second-largest stock exchange and a pioneer in regulated digital securities trading. BSDEX provides the regulated marketplace, custody, and clearing infrastructure, while TSG Lab AG delivers the end-to-end tokenization, smart contract, and compliance layer.

BaFin Regulated

Full German financial regulatory oversight under BaFin supervision

Institutional Custody

Blocknox GmbH — regulated crypto custodian for institutional-grade asset safekeeping

EU Passporting

Cross-border distribution to qualified investors across all 27 EU member states

Ready to Take Your Company Public via STO?

Contact TSG Lab AG to discuss how our Security Token Offering framework can provide your company with regulated access to public capital markets at a fraction of the traditional cost and timeline.